First of all, since accounting is so interrelated to business, begin by trying to develop an interest in business. This means reading all kinds of business magazines and the business section of your newspaper. Try to cultivate an interest and understanding of business now. It will help you later.
Observe business. That's the best way to get valuable experience. You can gain an insight into big business by, at least, reading about it. This will help you gain an appreciation of the people who run businesses and the many and varied responsibilities they have to deal with. Be concerned when a local business folds up; in your mind, try to analyze why it folded and what might have prevented it. When a new business starts up, look at it critically and analytically-what are its chances of survival?
Wherever you go, you can begin to observe businesses. You can start in your own neighborhood. Look over the pharmacy that you go to. Can you tell if the owner has a lot of pride in the business? Are there any signs of financial difficulty in the store?
Try to understand the causes of American business success and failure. In your future as a private or public accountant, many businesses may be placed in your hands for salvation. If you start to learn now, if you start to observe now, it will help you later. As an accountant, your understanding of a situation will be important in how much you can help in the problems of competition and poor management. Your understanding will help other people appreciate their own problems.
Before even starting on the path toward becoming an accountant, there are a number of important things you can understand now.
- We all make our living from business, whether directly or indirectly. Most of us either own a business or work for one. This is important, since most people-unless dependent on someone else-must earn money by working for a business. So we depend on business this way, and we also depend on business to provide goods and services that we can't provide ourselves.
- Large businesses produce what the small ones can't economically produce. For example, most small companies couldn't manufacture an automobile or steel. And so large companies produce items such as these on a mass-production scale. But small businesses do jobs that can't be done on a mass scale; also, they often can locate closer to people in areas that are not practical for large corporations.
- In this country, businesses are free enterprises, operating under individual initiative. Decisions are not made by the government (except, of course, by government regulatory agencies, which keep their eye on businesses for the public good in such matters as, say, air pollution and safety). Most of the decisions are made by business people. They are motivated by something called the "profit motive." Their decisions greatly influence their profits and the dividends they can pay their stockholders. Henry Ford is an example of someone in business who strove under the free-enterprise system. He was born and raised on a farm when this country was primarily agricultural. During his lifetime (1863-1947) the U.S. become the foremost industrial country in the world. His Ford Motor Company played a big part. With the profits he made from selling automobiles, he developed the assembly-line process, built new factories throughout the country, financed research, and helped business grow.
- "Competition is vital to all business." This is an adage that most Americans feel is true. Some businesses die because of their competition. For example, you've doubtless seen grocery stores or clothing shops close when others open up. In the end, say economists, this is not necessarily bad. Competition works to give consumers the best quality and lowest prices in the goods and services they buy. Without competition, we might be victims of monopolies.
- A need for goods and services can easily start a new business. You can see new businesses being established all the time. Gas stations go up at intersections along a new highway bypass because motorists need gasoline. Realtors plan a new residential area in the suburbs, and included in their plans are a small supermarket and a drugstore. When you see a new business going up, test yourself. Can you spot the need in the immediate area that motivated the businessman to risk capital, time, and energy in a new business?
- There are three main forms of business organization you should know about. First, the individual proprietorship is the most popular; it makes up the vast majority of the millions of business firms in this country. Second, the partnership is made up of two or more persons who jointly share capital outlay and responsibility and profits. Capital to start the individual proprietorship must come from the owner or must be borrowed by the owner. In a partnership, the partners provide the capital jointly, making the load easier on each of them. The third form of organization is the corporation. Here capital is more easily obtained. Corporations, while they can be owned by a single individual, are frequently owned jointly by many persons who are called stockholders. In all three organizations, the accountant is an important person. He is often placed at the right hand of the president in a graphic layout of the management of a large business.
